Childcare Payments Bill

Chloe Smith Excerpts

Monday 14th July 2014 Commons Chamber

[Catherine McKinnell]

No, I do not accept that. It is tempting for Government Members to quibble about measures and markers, and I know that a lot of time has been spent arguing about how to measure child poverty instead of recognising the desperate increase in it. The Institute for Fiscal Studies has projected that there will be 1 million more children in poverty by 2015 than there were in 2010. Government Members need to be careful when obsessing and arguing about those measurements while ignoring the reality, which is that hundreds of thousands more children are now living in homes that their parents cannot afford to heat, and struggling in households where their parents cannot afford to put food on the table and are using food banks.

When we look back on Labour’s record in government, we are proud of the introduction of the Sure Start local programmes and the subsequent huge expansion of Sure Start centres up and down the country. We are proud of the free part-time nursery education that we introduced for all three and four-year-olds. We are proud of the more affordable and higher-quality child care that we brought in through the employer-supported child care voucher scheme, and of the child care tax credits and the introduction of the early years curriculum. We are also proud of the increased financial support for families with children, including the introduction of tax credits and the increases in child benefit and maternity pay and grants. Those policies and changes were aimed at giving every child the best possible start in life but, perhaps more importantly, they lifted 1 million children out of relative poverty and more than 2 million children out of absolute poverty.

[Chloe Smith (Norwich North) (Con)]

Does the hon. Lady now recognise measures, then?

[Catherine McKinnell]

I genuinely do not understand the hon. Lady’s intervention. Obviously, we recognise that there are measurements of child poverty. The point I was making was—[Interruption.] No, I did not say that I did not recognise measurements of child poverty; we introduced them. What I find unacceptable is that the Government quibble and argue about how to measure child poverty rather than taking the necessary action to deal with a problem that is staring them in the face—namely, an increasing number of children in poverty. As the IFS concluded in 2011, the reduction in child poverty during the first two terms of the Labour Government was

“by far the largest and most sustained since”

figures began in 1961. As UNICEF pointed out when it compared child poverty levels internationally in 2010,

“without UK Government intervention in the form of cash transfers, tax credits and services for children and families, the UK would see a child poverty rate three times higher than its current levels.”

Government Members seem to be quite vexed about this issue, but I think that that is because they have a shameful record. Unfortunately, the story under this Government has been very different from that under the Labour Government. That is the case despite the promise in the Conservative manifesto in 2010 to

“make Britain the most family-friendly country in Europe”.

It added:

“We will help families with all the pressures they face: the lack of time, money worries, the impact of work, concerns about schools and crime, preventing unhealthy influences, poor housing.”

Let us not forget the Liberal Democrats—I am pleased that one of them is here today. Their 2010 manifesto claimed:

“Liberal Democrats believe every family should get the support it needs to thrive, from help with childcare through to better support for carers and elderly parents. Liberal Democrats will improve life for your family.”

Have those promises been translated into reality? We know that parents are facing a child care crunch because child care costs have spiralled, the number of places has fallen and the support that families receive from the Government has been slashed. One consequence is that progress on reducing child poverty has stalled.

--- Later in debate ---

[Chloe Smith (Norwich North) (Con)]

Mr Deputy Speaker, I am sure it took you many minutes to work out who the next speaker would be in this balanced debate that demonstrates that it is the Conservatives who are on the side of carers and hard-working families.

Child care is an important issue for the many working families I represent. I have been talking to lots of mums and dads, nurseries and pre-schools in Norwich, and I have already had the privilege of raising in Westminster Hall and this Chamber points they made about quality and affordability of child care. Too many people are prevented from being able to earn to support their family or to fulfil their career ambitions by the high cost of child care. As we all know, even part-time nursery places can cost thousands of pounds a year—indeed, child care costs have now overtaken mortgage interest payments to become the most significant monthly outgoing for many British families.

[Charlie Elphicke]

I was wondering whether my hon. Friend has noticed the complete absence of any Back Benchers on the Labour side of the Chamber? Increasingly it seems that the Conservative party is not only the party of the workers, but the party of child care as well.

[Chloe Smith]

My hon. Friend puts it extremely well, and perhaps makes my next point for me, which is that the previous Government failed to deal with the problem of child care costs, and it is the present Government, in particular the Minister for Women, my right hon. Friend the Member for Loughborough (Nicky Morgan), who are doing so.

The Under-Secretary of State for Education, my hon. Friend the Member for South West Norfolk (Elizabeth Truss), who is responsible for child care, has rightly said in the past that a changing economy means that parents need affordable and available child care more than ever, and a changing world means that children need a rigorous, rounded education more than ever. We have before us an opportunity to do both things at once. The context is the tax and benefit changes that came into being this financial year. The biggest reforms in a generation, they will create more jobs—indeed, they have already done so—and they are getting more people off welfare and into work. Child care follows from that, so let us see it in perspective. It is only by sticking to those kind of economic actions—a long-term economic plan, in fact—that we will build a more resilient economy and a more financially secure future for hard-working people and their families.

The cost of living cannot be seen in isolation. The British people cannot be flannelled with phony figures. There can be no economic or household security without the honesty and courage to control the public finances. Labour’s old way has failed—Labour Members would argue with that, if they were here to do so. More public spending led to more welfare bills and more government jobs that the country could not afford. They propose in this debate to use a levy they have already spent 10 times over. Why can they not afford parents the respect of some honesty? This Government, on the other hand, are backing businesses by cutting their taxes, so they can create jobs; cutting tax for individuals, so that their job pays; and controlling welfare, so that getting a job pays more. Universal credit is of course crucial and will be one of the most important reforms this Government make. By replacing working tax credit, it should help my female constituent who wrote to me last week to say:

“When I did work we were over the threshold for working tax credits by around £300 yet I would have to pay £12,000 in childcare cost to continue working.”

Let us look at some other current figures. I am drawing now on the Mumdex—the helpful piece of work that Asda does every month. The latest report shows a rise in spending power for the eighth consecutive month, leaving families £4 a month better off than last year. The main cause is a slowdown in essential item inflation, particularly food, clothes and mortgage interest payments—another sign of a sounder economy. Petrol costs fell again, which eased the pressure on household finances—indeed, under this Government, fuel duty is now more than 13p a litre lower than it would have been without our action, so that the average family saves £7 every time they fill up the tank.

Such results in family finances can only come about with control of the public finances, which has entailed serious decisions by the Government about what to spend hard-earned taxes on. Voters have serious decisions to make as well, as the Conservatives appreciate. As a previous Conservative election poster said,

“Don’t just hope for a better life. Vote for one.”

I am delighted that the Chancellor has put public money towards the tax-free child care scheme that we are discussing. It stands to ease costs for families even more, and here are five good reasons why I support it. First, it will be bigger and faster than first outlined, opening sooner and benefiting in its first year 1.9 million working families with children under 12. That is good progress already in the work that has to be done to bring the scheme forward. Secondly, it will be simple, flexible and easily accessible online. Thirdly, for the first time self-employed parents and those working for the great majority of employers who do not offer the existing employer-supported child care scheme will be able to take part.

Fourthly, the scheme will also help those working part time and on the minimum wage because of the low minimum earnings threshold of £50 a week. Fifthly, as my hon. Friend the Member for South Swindon (Mr Buckland) said, it offers more help for parents of disabled children by recognising that assistance ought to continue until the child is aged 17, rather than 12. I know from experience in my constituency how welcome that will be.

This all means that all working families where the parents earn at least £50 a week will have access to Government support for child care costs unless one of the parents earns more than £150,000 or receives support from tax credits, universal credit or ESC. All told, this gives families greater stability and more flexibility to make their own choices about their family picture. A male constituent told me:

“I’m now on £10K a year, at 39 years of age. My wife, an amazing mother, has to stay at home to look after two of our children, as we cannot afford the child care or would be worse off if my wife went to work.”

The personal allowance will rise in April next year to £10,500. My constituent then may be one of the 400 people in Norwich North who will be taken out of tax entirely by the actions of this Government. He will certainly be one of the more than 38,000 people in my constituency who will benefit from our tax changes. Universal credit will address the abhorrent benefits trap, which is reflected in the quote that I just gave. My constituent and his wife may also benefit from the scheme before us today. I welcome the targeted provision of taxpayer-funded child care for families on the lowest incomes.

[Mark Durkan]

On universal credit, does the hon. Lady recognise that there is a disparity, in that child care support under universal credit will not be paid through the sort of child care accounts that are available under this scheme; they will be only for costs that are already paid out, unlike under this scheme.

[Chloe Smith]

I do recognise that difference, and I am confident that the Minister will look at that carefully. I wonder whether we might deal with it in Committee, and whether Labour Members will be there to do so, as they are absent from the Chamber today. I recognise the point that the hon. Gentleman makes. I do not have the answer, but I am confident that the Minister is working on it.

The new provision, however it is implemented, will be targeted. It is important to add it to the provision that this Government have extended for families on the lowest incomes, beginning with all three and four-year-olds receiving 15 hours a week of free child care, and going on to target this offer to the 240,000 poorest two-year-olds. If that is how the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) defines doing nothing in our years in power, I cannot wait, and I am quivering in my boots, to see what she will do when she marshals some Back Benchers to help her into government.

Let me turn to a couple of points about the quality of child care that we all wish to see as we put the Bill through. I want more great child care to be available and to offer parents more choice and flexibility. I would also like it to be easier for new providers to enter the market and for good existing providers to expand, with consequent benefits for affordability and quality. The Under-Secretary of State for Education, my hon. Friend the Member for South West Norfolk, has said that we know that other countries, such as France and Germany, have excellent systems for comparable amounts of Government spending, while also paying staff good salaries and keeping parents’ costs affordable. I hope my hon. Friend the Economic Secretary to the Treasury will reassure us that the implementation of the child care payments scheme will be simple and cost-effective, will work with other Government systems such as universal credit, and will give parents the confidence that they need and deserve in affordable, achievable, good quality child care in this country.